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<\/a><\/p>\nYou need a futures trading plan for 2022\u2026yes YOU.<\/p>\n
A recent survey<\/a> of traders yielded some interesting figures:<\/p>\n But\u2026Only 34% have a system in place to manage those emotions.<\/p>\n As 2021 draws to a close, it\u2019s time to look forward to 2022.<\/p>\n Each of us needs to take inventory of our performance, acknowledging what we did right and wrong while identifying opportunities and risks.<\/p>\n Then, we need to craft plans that incorporate this analysis and turn to the future.<\/p>\n In this article, we\u2019re going to walk you through what we believe to be the most important components to creating a futures trading plan for 2022.<\/p>\n To start the review process, we need to step back and look at the big picture of 2021.<\/p>\n Your profit and loss statement is the ultimate arbiter of your success.<\/p>\n Take a look at your account balance at the start and end of the year and see how much you gained or lost.<\/p>\n At the same time, you want to build the narrative of what occurred throughout the year.<\/p>\n Ask yourself:<\/p>\n If you don\u2019t have a trading journal<\/a>, we recommend you put that on your to-do list for next year.<\/p>\n Now, compare your performance to the goals you set.<\/p>\n One of the most fascinating things traders discover is how they often underperform the lofty expectations they started the year with.<\/p>\n Newer traders commonly shrug off a mechanical approach that yields consistent but limited gains in favor of larger swings only to discover they would have performed better had they stuck with their original plan.<\/p>\n Over time, this urge begins to subside and you\u2019ll find yourself better at sticking with your plans.<\/p>\n As you look back at the year and begin to strategize for the next, create broad goals that you can refine into objectives.<\/p>\n Goals are what you want to achieve. Objectives are how you get there.<\/p>\n For example. I have a goal of turning a profit. Therefore, my objective is to generate $5,000 profit a month with an allowable range of +\/- $500 using strategy XYZ.<\/p>\n Each objective should be measurable, specific, and directly related to your goal.<\/p>\n That\u2019s why \u201cI want to earn $50,000 this year trading\u201d is an objective, not a goal.<\/p>\n Your goal is to turn a profit. Your objective would be how you plan to make this happen – the actions.<\/p>\n Now, you can\u2019t just leave it at \u201cI want to make money.\u201d<\/p>\n Your goals need to move you forward as a trader and trading as a business.<\/p>\n Here are some examples:<\/p>\n If you\u2019re new to futures trading we recommend you read A Beginner\u2019s Guide To Futures Trading<\/a> to come up with ideas.<\/p>\n Every year, millions sign up for gym memberships, resolving to become healthier in the new year.<\/p>\n By March, most of these people have given up.<\/p>\n Traders start each year with high hopes and expectations. Yet, they quickly get bogged down in the day-to-day and lose focus of their futures trading plan.<\/p>\n That\u2019s why every trader needs to set up a regular performance review, just like a business.<\/p>\n Make each review focus on your goals and objectives by creating milestones to measure your progress.<\/p>\n These reviews don\u2019t need to be extensive, but they do need to be structured. You should be able to easily measure your progress from one review to the next. That\u2019s a lot easier when you perform the same tasks each time.<\/p>\n Getting into the nitty-gritty, we look at the performance of our individual strategies.<\/p>\n To be fair to each one, we need to honestly answer whether we gave it a fair shake. Quite often, we jettison or deviate from our game plan and then blame the strategy. In reality, it was our fault.<\/p>\n Analyze trading strategies using the same criteria noted earlier such as average profit\/loss per trade, number of trades per day, etc. Then, take these metrics and compare them to your goals.<\/p>\n You want your trading strategy to align with \u2018what\u2019 you want to achieve. And that\u2019s more than just overall profitability.<\/p>\n For example. A strategy with a high win rate is more appropriate for someone seeking consistency even if it doesn\u2019t lead to the highest total profits.<\/p>\n Next, we want to dig into the individual trades to see what led to our profits or losses.<\/p>\n Oftentimes, a few key trades make up most of our profits or losses for the year.<\/p>\n As we go through the line items, identify these outliers. We want to determine whether they occurred naturally as part of the strategy or from our own decision-making.<\/p>\n This is key to uncovering our risks and opportunities.<\/p>\n You would be surprised how much your overall performance can change by doing better on just a few trades.<\/p>\n Lastly, you need to identify the symbols and assets you plan to trade whether it\u2019s the Micro E-Mini Nasdaq 100 Futures<\/a> or Micro E-Mini Gold Futures<\/a>.<\/p>\n To pick the right products, look at the margin requirements, liquidity, typical volatility, and contract specs. When selecting more than one product, make sure to calculate the correlation between the assets so that you don\u2019t inadvertently create concentrated risk.<\/p>\n Along those lines, your annual futures trading plan must focus on risk management.<\/p>\n At the end of the day, once your account goes to zero, you\u2019re done.<\/p>\n That\u2019s why even the most lucrative trading strategy isn\u2019t worth it if there is a high risk it obliterates your account.<\/p>\n Risk management boils down to two concepts.<\/p>\n Trade size – <\/strong>Trade size can be calculated as a percentage of capital, a set number of contracts, and a host of others.<\/p>\n You want to explore different methodologies to find the one that works best for your strategy.<\/p>\n Don\u2019t be afraid to put two up against each other and let them compete for your favor. However, make sure that your trades are sized so that no one trade or series of bad trades can wipe out your account.<\/p>\n Entry and exit management<\/strong> – Some traders have one entry and one exit. Others scale into and out of trades. The right one for you depends on your goals and strategy.<\/p>\n Also, look at how well you adhere to your stops. It\u2019s one of the most common account killers.<\/p>\n Disclaimers: The placement of contingent orders by such as a \u201cstop-loss\u201d or \u201cstop-limit\u201d order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders<\/p>\n As we discussed in our previous article<\/a>, technology audits help traders optimize their performance.<\/p>\n This should come after you establish your goals and objectives as well as your strategy review.<\/p>\n Our technology needs to support what we want to achieve in the coming year and how.<\/p>\n A trader planning for high-frequency, fast execution needs a platform and data feed with as low a latency as possible.<\/p>\n Technical traders require a platform with the appropriate tools and indicators to aid their analysis while minimizing other distractions.<\/p>\n Just as important, you want to explore the technology that\u2019s out there.<\/p>\n Footprint and volume profile methodologies are extraordinarily powerful. Yet, unlike Optimus Flow, many platforms don\u2019t include them.<\/p>\n Your technology audit should not only assess what you need now but identify additional opportunities for you to expand.<\/p>\n We mentioned it before, but this deserves its own section because it\u2019s that important.<\/p>\n Trade journals are a must if you want to improve over time. They hold you accountable, giving you an honest assessment of what\u2019s really going on.<\/p>\n No other single tool can help a trader analyze their performance better.<\/p>\n Some traders use paper and pen. The most common method is a spreadsheet.<\/p>\n However, there are some amazing tools out there such as the automated journal available through Optimus Flow<\/a>.<\/p>\n You want to collect enough information to analyze and measure your objectives at your regularly scheduled reviews.<\/p>\n At the most basic level, you need to include the transaction information such as time and date, trade size, entry and exit price, as well as symbol.<\/p>\n Beyond that, you can include qualitative information such as market notes.<\/p>\n Futures offer an exciting world of opportunities.<\/p>\n Now that you know how to create your own futures trading plan, you can get started trading futures with Optimus Futures using our flagship Optimus Flow platform.<\/p>\n\n
Assess this year\u2019s performance<\/h2>\n
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Set new goals and objectives<\/h2>\n
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Create a regular performance review<\/h2>\n
Analyze your trading strategy<\/h2>\n
Discuss risk management<\/h2>\n
Perform a tech audit to review if the tools you use are meeting your needs<\/h2>\n
Journal your trades for better accountability<\/h2>\n
Start trading futures in 2022<\/h2>\n